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A Stephenson Group White Paper
Public Relations and Marketing
Integrated Strategies for Revenue and Profit Growth
Public relations programs must contribute directly to the revenue and profit goals of the enterprise. They will only do so when they are effectively integrated into the overall marketing strategy. Marketing strategy must determine the direction and content of public relations activity.
Stages of Market Development
Marketing strategy will itself vary with the stage of market development that the enterprise or product has achieved. Technology firms that develop sophisticated, high-value products must pass through four progressive stages of market development in order to achieve sustained profitability:
- Awareness - In this stage, the technology provider must ensure that key target customers recognize the company and its product/service brand, and are generally cognizant of the market segments it serves.
- Knowledge - In this stage, the providing firm must ensure that decision makers at its key targets are aware of the full range and scale of generic benefits that the type of product it markets can deliver, and that they also recognize at least some of the major players in the market sector served.
- Preference - In this critical stage, the enterprise must make target decision makers understand and appreciate the specific benefits and attributes that differentiate its offerings from those of any competitor.
- Conviction - This is the closing stage, when the provider convinces key targets to negotiate product purchases. The conviction stage implies that target customers have established purchase budgets and obtained senior management approvals.
Market Stages and Marketing Channels
There are three channels that technology providers can use to implement their marketing strategies: advertising, product marketing, and public relations. The effectiveness of each of these channels varies with the stage of market development.
Figure 1. The relationship of marketing channels to market development stage |
Advertising is generally most effective in the initial awareness and knowledge stages, where the provider wants to promote recognition of its brand and of the needs of the market it serves.
- Product marketing techniques, like direct mailings and special promotions, are generally most effective in the knowledge and preference stages, where the provider wants to familiarize targets with the benefits and differentiating characteristics of its product.
- Public Relations techniques are extremely flexible, and can be adapted to the specific marketing objectives for any stage of market development.
Marketing Channel Selection
The effectiveness of each market channel will also vary with the sophistication of the prospective user and the degree to which a product has become commoditized. Unsophisticated users will tend to make decisions based on superficial product attributes (what's "in" or "hot"). On the other hand, sophisticated users will take a more critical approach - examining products closely to determine which best fits their needs and delivers the greatest added value.
If numerous competitors offer products with roughly equivalent function, performance, and quality, then buyers will base purchasing decisions on price. However, price will play a much less critical role in the purchasing decision where products are clearly differentiated by unique capabilities and performance.
Figure 2: Marketing Channel Effectiveness |
Commoditized products designed for mass audiences are most effectively marketed through mass media advertising, while high value-added products developed for highly focused markets are most effectively marketed through the public relations channel.
The product marketing channel occupies an intermediate position on the graph. If a provider can apply product marketing techniques to emphasize critical features and benefits for discriminating buyers, thereby differentiating (or "de-commoditizing") its product, it is elevating the product marketing channel into the upper left quadrant.
Market Channels Costs and Budgeting
The economics of the three marketing channels also vary significantly. The marginal cost of broadcasting a 30-second commercial during the Super Bowl can run to millions of dollars, but the spot will be seen by millions of viewers. Relatively few, however, will be qualified prospects for sophisticated technology products. The marginal cost for a favorable story appearing in a leading trade publication or business journal may be close to zero. Such a story may reach fewer than a hundred thousand readers, but a great percentage of these will be qualified targets for a provider's product.
Figure 3: Marketing Channel Tradeoffs |
Figure 3 illustrates the relative cost and access attributes of the three principal marketing channels. Advertising maximizes the number of people who may be reached, but few of those reached may have the need or authority to purchase the product advertised. When total advertising costs are divided by the relatively small number of qualified buyers reached, the cost per qualified buyer becomes very high.
Product Marketing occupies the opposite position in the graph. Providers can prepare relatively low cost materials and present them to target individuals inexpensively through direct mailings or handouts at trade shows, and almost all recipients will represent qualified users. The downside is that these marketing techniques will invariably miss a significant proportion of the total set of qualified buyers.
Effective public relations bridges the gap, delivering a provider's value proposition to the highest number of qualified buyers at the lowest possible cost. By identifying a company's current stage of market development and understanding its overall marketing objectives, public relations professionals can target qualified buyers effectively through a wide variety of media, including professional and trade periodicals, general business publications, executive speaking appearances at conferences and trade shows, and interviews with leading industry journalists and analysts.
Effective public relations can leverage these media forums to supply the critical added dimension of third-party authentication, the transmission of your message through the trusted voices of journalists and industry analysts. This added dimension is particularly effective in moving qualified buyers into the final and most critical stage of market development, conviction.
Traditional public relations firms focus their energies on producing nebulous benefits like improved "image." Stephenson Group focuses on increasing your revenues and profits. We harness the credibility of traditional PR techniques to the marketing objective of increased sales. If you would like to know how Stephenson Group can boost returns on your marketing investment, please contact:
Chris Pillsbury
800-474-5025 Voice
805-772-4735 Fax
cpillsbury@stephensongroup.com |